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Apply to Foundation Grants in 7 Steps: a Beginner's Guide for Nonprofits

Updated: May 25, 2019



I think we can all agree that grant writing is complicated. And when you try to learn how it all works, it seems like nobody really wants to help you, they just want to charge you for their grant writing expertise.


But the truth is, you do not need to be an expert or pay thousands of dollars for services in order to apply for grants.


In fact, once you learn the fundamentals of grant writing you can start applying for grants right away. All on your own.


This guide will teach you everything you need to know about foundation grant writing, including key terminology, proven strategies, and some of the secrets that expert grant writers use, so you can hit the ground running toward your first successful grant.


What is a grant?


First things first.


A grant is a financial contribution that a government agency, a corporation, or a private foundation gives to a nonprofit organization. Its different than a donation, however, in that:

  1. Grants are awarded through a competitive application process and;

  2. Grants come with rules for how the money can and can’t be spent.

The purpose of writing grant proposals to funders, therefore, is to prove that your project deserves their funding and that you will have a good plan for how to spend the money.


How to master grant writing


You wouldn’t know it from the name but grant writing is actually a series of many different steps and skills. Only two of the seven steps I’m going to share with you heavily involve writing.


This is why many new learners get discouraged by grant writing. They get overwhelmed by all the different moving parts and don’t know where to start.


Here’s the solution.


Take this complex process and break it into a series of bite-sized steps. Once you do that, you’ll see that most steps are pretty straightforward.

And once you learn these steps, you will be able to use them again and again to find grants.


These are the seven steps that successful grant seekers use to obtain grants:

  1. Outline the project or program

  2. Search for funders

  3. Create a list of prospects

  4. Build a funder relationship

  5. Send a letter of inquiry

  6. Submit a full application

  7. Ask for feedback


Not every grant project will require all seven steps, but master these seven and you will be prepared for any foundation grant opportunity.

1) Outline your project


The key to obtaining a grant is finding a funder whose interests and priorities align with your organization. Before you start learning about funders however, you need to learn about your own organization.


That sounds like some cheesy adage, I know.


But you’d be surprised how many organizations set out looking for funding without having a firm understanding of their own needs or the characteristics of their program.


Here’s what you do.


Take some time to outline the main details of your organization and your program. This will guide your grant search and help you avoid wasting time with the wrong funders.


Important note: when you ask for grant funding, you usually request money for one specific program. This means if you have multiple programs, you must outline each separately.


It’s crucial that you get this right.


Organizations with multiple programs will sometimes try to describe all their efforts at once to funders. And it’s a big mistake.


Funders want to know that you are laser focused on the issue they care about. When they read about all your different programs at once it sounds like: “we sorta do some of this, and we also do some of that, oh and this other thing...”


The work that matters to them doesn’t stand out.


So by outlining each program separately you will be able to keep your search for funders focused of those who only care about that specific issue, and when it comes time to write your proposal, you will be speaking directly to their interests.


Now, here are some of the key details that you need to know about your project.


Program category


There are thousands of different nonprofit programs. It would be impossible for a funder to list all the specific programs they fund.


Instead they use a handful of broad categories.


The most common terms you will encounter are:

  • arts and culture

  • community and economic development

  • education

  • environment

  • health

  • human services

  • human rights

  • religion

  • science

  • social services


You need to learn which which category your program fits in to.


Target population


This includes the race, sex, and income level of the individuals you serve.


Many foundations are interested in advancing equity in their grantmaking or helping underserved populations. If you can speak to these interests you will have a leg up on the competition.


Requested grant funding


Small organizations in particular often start their grant search without any idea of how much funding they need, or how much they should ask for. All they know is they want more than what they’ve got.


Don’t we all.


When you ask for funding, however, funders require you to ask for a specific amount. And this amount needs to be justified.


Also keep in mind that most funders aren’t going to give you a grant that is larger than 10% - 20% of your total annual organization budget.


So you should have at least an approximate amount in mind before you start searching so you can find funders that make grants in that range.


Grant funding type


This last piece of information isn’t so much a characteristic of your program as it is an understanding of the terminology that funders use (and expect you to know as well.)


Funders typically classify grants into three categories:

  1. Program support

  2. Capital support

  3. General operating support

Program support is funding that must be used toward one of your specific programs.


Capital support is used for building or construction, or major equipment purchases.


General operating support can be used for anything but, in particular, is often used for improving your organizational capacity and effectiveness.


Most foundations offer program support, while capital and operating support are less common. Make sure you know which type you need so you can find a funder who will work with you.


There are, of course, other key details that matter for your grant search, such as where you operate and your organization mission but these don’t need any explanation.


Now, lets learn how to put this information to use and find funders who are going to give you a grant.


2) Search for Funders


Now that you have your outline, the name of the game is to find a funder that aligns with all of your key program characteristics.


Nonprofits in the greater Los Angeles area can use our free five-minute foundation match tool to jump start their grant search.


For everyone else there are three methods for finding grant opportunities.


Search for grants on your own with free tools and methods


I will be making a comprehensive guide on this subject. But a free tool you can start with right now is Foundation Center FDO quick start.


It will give you a list of foundations in your region.


Most foundations give to organizations in their immediate area so it makes sense to start with these local foundations first.


Pay for a foundation database subscription


The second option is to sign up for a foundation database subscription.


These services come in a range of different prices and features but they all give you a more specific list of potential foundations based on your program and organization characteristics.


You still have to further evaluate your matches, however, which can be tedious.


Hire someone to search for you


Some organizations hire a grant writer to find and apply to relevant grant opportunities for them. The appeal is that you can have someone do all the work for you.


But be careful.


Hired writers are expensive and it’s difficult to know the quality of service you will receive. And, in fact, you will still end up having to do some of the work yourself.


For these reasons, this is my least recommended method.


Take the time to invest in yourself and learn how to do a grant search on your own.

You can then go with method 1 or 2 (or both) and get far better results for your organization.


3) Create a list of prospects


As you are grant searching, you will want to keep track of funders and potential grant opportunities.


The best grant writers do this to stay organized make effective use of limited grant writing resources.


If you decide to use a grant search software, this feature may already be built in. But you don’t need software to do this.


All it takes is a spreadsheet or some other type of list. Use whatever works best for you.


The key is to keep track of foundation names, websites, upcoming deadlines, notes from conversations you’ve had with foundation staff.


Try to rank your prospects by how good a match they are for your organization so you can prioritize which foundations to apply to.


This next tip is slightly unconventional.


You should also keep track of which foundations you have ruled out. You may be looking through dozens or hundreds of foundations and if you have been grant searching for awhile you may forget why a foundation is not a good fit.


And this makes even more sense when you consider this final piece of advice:


The most important reason to keep a record of prospects is that you may need to hand over grant writing duties to someone else at your organization at some point.


You don’t want all your grant searching efforts to leave the organization when you do.

4) Build a funder relationship


There are two types of foundations: those that require invitations to apply and those have an application process that’s open to all.


For those that are invite only, relationship building is essential. I wrote this guide on how to master the process.


But relationship building can also help even when it’s not explicitly required. And this is an big opportunity that most nonprofits miss.


It’s actually pretty simple.


Your goal is to make the foundation aware of your organization and take an interest in your work before you apply. At the very least, you can achieve this with one phone call or email with the foundation program officer prior to applying.


When they are reading your proposal this name recognition can help you stand out from the crowd and give you a slight edge that can get your application to the accepted pile.


There’s also a caveat:


At larger foundations, you will probably end up initially talking to the grants manager, who is not the same as the program officer who evaluates applications. So it might be a little extra work to get the attention of a program officer in these cases.


But there are multiple benefits this technique.


Talking with foundation staff can also give you information that you can’t get from the website alone.


They might tell you about a grant opportunity you missed, they can help you decide whether or not to apply, and they might even let you know about other foundations that fund organizations like yours.


The bottom line is:

This is a low effort, high potential upside strategy that you must take advantage of.


5) Send a letter of inquiry


Finally, it’s time to talk about the application.


I told you this wasn’t all about writing.


Most foundations use a two-step process. The first step is called a Letter of Inquiry or LOI. The second step is the Full Application, which I’ll discuss next.


The purpose of the LOI is for the foundation to learn about your work in a brief one to three page letter without making you create a full length application.


It used to be that a letter of inquiry was an actual letter in the mail. But now more and more foundations use an online application. Even so, they still call it a letter of inquiry.


Now pay close attention.


Each foundation handles the LOI process a little differently. You need to make sure you follow the right procedure or else you will end up straight in the reject pile.


Situation 1 - The funder has an online letter of inquiry


This should be fairly straightforward. Follow the foundation website instructions for creating a grant portal account and filling out their online application.


If you are in the greater Los Angeles area, learn how you can save time and apply more effectively with our Universal Grant Application.


Situation 2 - The funder requests a hard copy LOI and provides instructions


You are going to be writing a hard copy letter. The key is to do exactly what the foundation asks for in the instructions. No more, no less.


If a page limit is given, stick to it. Otherwise aim for a one page letter.


Even if submitting the letter by email, be sure to put the document on organization letterhead, sign it, and address it in proper business letter style.


Situation 3 - The funder requests a hard copy LOI but does not give instructions


This is where it gets tricky. The funder now magically expects you to know what to write.

Luckily for you, I created a guide to walk you through the process of writing an LOI from scratch.


Situation 4 - The funder doesn’t specify


If the funder does not ask for an LOI, they might be an “invite only” foundation. The best thing to do is to call them and ask how to apply.


6) Submit a Full Application


If the funder is impressed by your LOI, they will invite you to submit a full application and give you instructions for how to do so.


This is the main event. All your other efforts have been leading up to this.


While every application is different, there are seven common sections that most funders ask you to write.


They are: Need Statement, Program Design, Outcomes, Organizational Capacity, Evaluation, Future Funding, and Budget.


I will be creating a guide that explains all these sections in depth.


Now, I won’t lie.


This is the hardest step in the process to learn. It is also time consuming to complete a full length grant application.


But the good news is that once you have written a full application once, each subsequent application becomes dramatically easier.


This is partly because you only need to learn once. But, also, since foundations ask similar questions, you will be able to reuse your same writing again and again.


So don’t get discouraged.


Conquer this last hurdle in the application process and you will open a whole new door of opportunity for your organization.


7) Ask for feedback


The final step is another trick that grant savvy organizations use to gain an advantage.


First of all, when you apply for grants you are going to be rejected sometimes. In fact, you might get rejected often. Its inevitable.


What matters is what you do next.


What most organizations don’t know is that some foundations give feedback as to why you were rejected. You just have to ask.


You can use this information to improve your next application to them or keep the advice in mind when applying to a different funder.


You might learn about hidden preferences that aren’t written on the foundation website.


Or you might discover that the reviewer didn’t understand your proposal and you need to do a better job explaining what you do.


In any case, this is a easy to implement strategy that will set you up for long term grant writing success.


Conclusion

So what should you do next?


First, make sure you have 501(c) (3) status or you will be ineligible to apply for most grants.


Then you should start going through the steps I outlined in this article. The best way to learn is by doing.


Take action and start learning one step at a time.


Don’t worry if you don’t know how to write the full application grant sections yet. You can still start grant searching and sending in LOIs.


It usually takes a few months for foundations to read your LOI so that will give you time to learn more about the full application.


If you’re curious what an LOI or full application looks like you can view and download some winning samples.


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